Case Law Details
Jagannath Promoters & Builders Vs DCIT (Orissa High Court)
Conclusion: Reassessment under section 148 was not justified as ‘reason to believe’ that income for the AY in question had escaped assessment was based on a mere ‘change of opinion’.
Held: Assessee was a partnership firm. It filed its return for the AY disclosing a total income of Rs.15,30,110/-. The return was picked up for scrutiny. In response to the notices under Sections 142 (1) and 143 (2), assessee appeared before AO and produced its books of account including cashbook ledger, audit report, balance sheet and profit and loss (P & L) account. AO passed the assessment order under Section 143 (3) determining the total taxable income as Rs.18,43,708/-. Accordingly, the tax payable was determined as Rs.1,39,054/-. In the assessment order, AO disallowed Rs.3,13,600/- on account of sundry creditors. AO under Section 148 had sought to reopen the assessment of assessee for the assessment year 2009-10. It was held that the reasons for reopening the assessment did not point to any new material that was available with the Department. What appeared to have happened was that the same material viz., the accounts produced by assessee were reexamined and a fresh opinion was arrived at by the Opposite Party regarding the claim of the deduction of Rs.48,183/- on account of the loss of sale of assets. This had already been disclosed in the detailed accounts filed by asssessee. In fact, a questionnaire had been issued by the AO in the course of the original assessment proceedings to the Assessee which was responded to by assessee. There was conscious application of mind by AO to the said materials. Therefore, the inevitable conclusion was that the ‘reason to believe’ that income for the AY in question had escaped assessment was based on a mere ‘change of opinion’.
FULL TEXT OF THE JUDGMENT/ORDER of ORISSA HIGH COURT
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